TMI Blog2016 (11) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act and has not brought any material on record to show that how the expenses claimed by the assessee were unreasonable or excessive. The Tribunal further found that it is for the businessman to decide what expenses are essential in the conduct of his business and the AO cannot enter into the shoes of a businessman and decide what expenses he should incur and what he should not incur for the purpose of business. Accordingly, the Tribunal affirmed the finding of CIT (A). The Tribunal, therefore, vacated the disallowances - Decided in favour of assessee. Disallowance of lease rental paid in respect of plant and machinery taken on hire - Held that:- There was no physical transfer of machinery and it only amounted to rent expenses. Learned Counsel for the assessee has correctly relied on a decision of this Court in the case of Commissioner of Income Tax vs. Modi Xerox reported in ( 2010 (2) TMI 945 - Allahabad High Court ) wherein a similar issue has been considered and the rental paid for various items by the assessee who are allowed - Decided in favour of assessee. Inclusion of excise duty in the closing stock - Held that:- An identical question has been answered by this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Vinod Kumar Misra, JJ. For the Appellant :- S.C.,A.N.Mahajan,C.S.C. For the Respondent :- R.R.Agarwal,Suyash Agarwal ORDER Heard Sri Shubham Agrawal, learned Counsel for the revenue and Sri R.R.Agarwal, learned Senior Counsel assisted by Sri Suyash Agarwal, learned Counsel for the assessee. This is an appeal filed by the revenue under Section 260-A of the Income Tax Act, 1961 against an order passed by Income Tax Appellate Tribunal dated 17.03.2006. The appeal relates to the assessment year 1994-95. The substantial questions of law on which the appeal was admitted are quoted here-under:- Substantial Question of law No.1. (1) Whether on the facts and in the circumstances of the case, the Tribunal is justified in directing the A.O. to examine the relevant clauses of the scheme and the fact relating to the alleged subsidies and thereafter allow the claim of the assessee in view of the order of Tribunal dated 30.11.1999 in the case of Simbholi Sugar Mills Ltd. ITA No.1439/Del/1990 for A/Y 1986-87 in as much as the facts of the case relied upon by the Tribunal are not similar and identical to the facts of the present case? Insofar as the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of business. Accordingly, the Tribunal affirmed the finding of CIT (A). The Tribunal, therefore, vacated the disallowances. This issue is also decided in favour of the assessee and against the revenue. Substantial Question of law no.4 5, both are similar in nature. (4) Whether on the facts and in the circumstances of the case, the Tribunal is justified in confirming the order of CIT (A) in deleting the disallowance of ₹ 2,51,433/- made by the assessing officer on account of disallowance of lease rental paid in respect of plant and machinery taken on hire ignoring the fact that payment are merely financial arrangements but have been given a color of sale and lease back transactions? (5) Whether on the facts and in the circumstances of the case, the Tribunal is justified in confirming the order of CIT (A) in deleting the disallowance of ₹ 2,51,433/- made by the assessing officer on account of disallowance of lease rental paid to various companies including Dhampur Sugar Mills Ltd. which have substantial interest in assessee's companies and there was no physical transfer of machinery? Insofar as the questions no.4 5 are concerned, the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in favour of the assessee and against the revenue. Substantial Question of law No.7. (7) Whether on the facts and in the circumstances of the case, the Tribunal is justified in deleting the addition of ₹ 42,28,640/- made on account of interest payable to Dhampur Sugar Mills provided in the books of account without appreciating the facts of the case? Learned Counsel for the revenue has sought to argue that while giving the details the yearwise breakup was not given by the assessee. However, the findings recorded by the Tribunal are otherwise and it has relied on a decision of Hon'ble Apex Court in the case of Kedarnath Jute Manufacturing Co. Ltd. vs. Commissioner of Income Tax reported in 82 ITR 363 wherein the Hon'ble Apex Court decided that ascertained liability was allowable deduction to the assessee while computing the income, even though the same had not been entered in the books of accounts of the assesse or even if they did not march the entries in the books of account. The findings as recorded by the Tribunal are that the assessee was following the mercantile system of accounting and the Auditors have qualified the report on this point as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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